It is reported that Malaysia Steel Works Bhd expects the bigger project value under the 10th Malaysia Plan to boost its business from the government sector to 25% within the next 5 years from 15% currently.

Mr Datuk Seri Tai Hean Leng MD & CEO of Masteel said that the 52 high impact projects worth MYR 63 billion earmarked for 10MP was substantially higher compared with the MYR 33.1 billion allocated under 9MP.

He added that "Steel consumption is expected to grow steadily over the next five years. If 10MP can materialize, contribution from the public sector could increase to 20% to 25%."

Mr Tai said that jobs from the private sector currently contributed about 85% of Masteel’s business. He added that "These jobs comprise commercial and housing projects. Masteel was involved in projects within the Iskandar Region but declined to elaborate. We are a supplier to the region. Last year, there has been an uptake in demand for steel."

Mr Tai said that the projected 5% growth in domestic steel demand at the Malaysian Iron and Steel Industry Federation conference recently would augur well for steel companies. He added that "With Masteel’s increase in production capacity for 2010 to 500,000 tonnes from 450,000 tonnes, we expect a 10% export growth this year."

According to Mr Tai, Masteel exports its finished products to Australia and New Zealand while its semi finished products were sold to countries such as Vietnam, Indonesia and Thailand. He said there was a misconception that the higher iron ore prices currently would squeeze Masteel's margins.

He said that "The rise in iron ore and coking prices have no impact on Masteel's production costs because the company uses prime steel scraps as its main raw material. The strengthening of the ringgit will also help in reducing the cost of importing steel scraps from overseas."

(Sourced from www.thestar.com.my)